Sunday, April 30, 2006

Everyone's a critic

My Entertainment 2.0 column in the Boston Globe today talks about the relationship between professional criticism (of movies, music, books, etc) and amateur criticism (posted on sites like Netflix, Amazon.com, and Blogcritics.org). A snippet:

Already, consumers can sample a broader range of critical opinion on the Internet -- some of it relevant and thoughtful, covering products that wouldn't ordinarily be reviewed by the mainstream media, and some of it biased or one-dimensional. (''This game rocks!" ) And marketers, such as movie studios and book publishers, are trying to figure out how Internet tastemakers figure into their relationship with their customers.

This year, for instance, movie studios have chosen to forgo advance critics' screenings for more new movies than they did during the same period of last year. The supernatural thriller ''Silent Hill" wasn't shown to critics before it opened on April 21 -- some of the first reviews showed up on the website AintItCoolNews.com that morning -- and yet the movie was last weekend's best box office performer.

I call this movie `sampling' -- giving prospective viewers something more than just a quick-cut trailer to go by. I do think it can have negative effects, perhaps persuading some people that the trailer dolled things up deceptively. But it can have an upside as well, bringing in ticket-buyers who may have been on the fence, waiting for the DVD release.

- This gist of this Wall Street Journal piece on hedge funds getting more involved in motion pictures is that hedge fund managers think they can reduce the risk of putting money into movies and pick surefire winners. But studios aren't allowing them to invest in some of their top-shelf projects, like `Spider-Man 3,' `The Da Vinci Code,' or the next James Bond movie. Kate Kelly writes:

Wall Street has historically shied away from dabbling in movie production, which was considered a fool's game because of the difficulties inherent in predicting the public's fickle tastes. But a handful of hedge funds and other money managers, flush with cash and eager to find investments that don't rise and fall with the broad stock, bond and currency markets, are plunging in. They see Hollywood as a $50 billion industry with the promise of double-digit returns for the right portfolios of movies. Armed with computer-driven investment simulations, some think they can pick movies with the right characteristics to make money.

"For me, it's a widget business," says Ryan Kavanaugh, a former venture capitalist who lost his shirt -- and was hit with some shareholder lawsuits -- in the dot-com bust but has had a key role in a number of recent film-financing deals. "As long as it fits the [investment] model, we don't care."

And a bit later in the article...

Yet in a business where the conventional wisdom says that 10% of a studio's films are responsible for 100% of its profits, even a passel of Harvard Business School graduates may not be immune to the pitfalls faced by nearly every investor to have hit the intersection of Hollywood and Vine.

Some long-time investors in the sector think the downpour of new cash won't last long. "The question is not if the money will dry up, but when," says John Miller, a managing director at J.P. Morgan Chase & Co. who has dealt with the entertainment sector for almost 40 years. Except in a handful of cases, Mr. Miller has stuck to lending Hollywood money, instead of taking what amounts to equity stakes in films.

Friday, April 28, 2006

Apple CEO Steve Jobs says he'll stay focused on that company - and that he'll be spending less time focusing on Disney than he did on Pixar, now that the cg-animation firm has been acquired by The Mouse.

From the Associated Press:

"I think there are people that can do a better job at that than me," Jobs told The Associated Press on the day the Disney-Pixar acquisition was announced. "My interest is really just being on the board and helping Bob [Iger] make this combination super successful and helping him in any other way he asks me to."

Jobs' remarks Thursday were good news to George Caldwell, owner of a llama ranch in Sonora, Calif. and a longtime Apple shareholder.

"It was reassuring to hear that he was going to spend more time at Apple," Caldwell said. "I'm issuing a buy order to my friends now."

Thursday, April 27, 2006

First screens with digital-only projection booths ... More on the NAB Digital CInema Summit

- I'm surprised to see that Dolby Labs is still adding screens to its digital cinema roll-out...the conventional wisdom was that they probably wouldn't build on the 84 screens they deployed in the US for last year's `Chicken Little' in 3-D. But a release issued yesterday says they're doing another 20 screens with Utah-based MEGAPLEX...including one new multiplex in South Jordan that will have only digital projectors in seven of its projection booths. That's a big deal, because this is one of the first signs that theater owners are confident that there will be enough digital content coming from studios to skip the film projector.

- EDN has a nice write-up of last weekend's Digital Cinema Summit at NAB.

Wednesday, April 26, 2006

`Journey to the Center of the Earth': First digitally-produced 3-D movie?

It's not exactly the first movie to be shot that way (I'd guess that Jim Cameron's `Ghosts of the Abyss,' released in Imax theaters, deserves that distinction), but certainly it'll be the first full-length feature film. 3-D releases so far have consisted of animated movies such as `Chicken Little' and `Monster House,' which were produced for 2-D release and converted to 3-D at some expense ($5 million to $10 million, I'm told).

I'd expect that there will also be a 2-D version of `Journey' distributed on film, for all those theaters that don't have digital projectors...Production starts in Montreal this summer.

I didn't hear a whole lot that was shockingly new at Tuesday night's panel on `Video Goes Internet' in San Francisco... but maybe I've just been going to too many of these panels. (Can you have a panel with `video' in the title and not invite Google Video's Jennifer Feikin?)

Some interesting points:

- Internet video viewers are very engaged with what they watch (moreso than TV viewers), and so advertising appended to Net videos commands a high price.

- Feikin says that the most popular videos tend to be short-form comedy and, surprisingly, self-produced testimonials about products or services.

- Blake Krikorian of Sling Media says that he expects more consumers to engage in 'multi-screen viewing,' watching TV while also pulling up content (related or unrelated) on a laptop.

Warner Home Video's `Rumor Has It' will be the first double-sided DVD, with standard-definition content on one side, and high-definition content on the other (in the HD-DVD format). It'll be in stores May 9th. I wonder if at some point we'll see double-sided DVDs with HD-DVD on one side, and Blu-ray on the other. No word on how the Kandinsky-esque Kevin Costner flick will be priced... it's inevitably more expensive to produce these double-sided discs, so if they're priced the same as a regular DVD, that means Warner's profit margin is slimmer.

Finally, the Web's most opinionated man, Mark Cuban, will be hosting a once-weekly talk show about "sports, business, and everyday life" starting this summer on Sirius Satellite Radio. My prediction: the first caller will be some budding filmmaker hoping Cuban will finance his project. Second caller: some theater owner (or director M. Night Shyamalan) complaining about Cuban's day-and-date releasing strategy.

The gist is that when you upload your video (standard def or high-def), CustomFlix plans to be able to help you sell it in any physical format that now exists or is yet to be invented: Blu-ray, HD-DVD, digital download, inter-cerebral transmission...

James Cameron at NAB ... New digital cinema cameras

Jim Cameron spoke yesterday at the National Association of Broadcasters show in Vegas yesterday. The message, according to The Hollywood Reporter, is that digital 3-D projector is essential to theaters' future, since it offers an experience that can't be duplicated at home. His prediction:

"We will reach a point in a few years when every major studio will ask how many of its four or five annual tentpoles should be in 3-D," Cameron said. "It will become almost a rule that all major 3-D animated releases will be made available in 3-D."

On the digital camera front... DV.com has posted a conversation with Ted Schilowitz about the forthcoming Red camera, the development of which is being funded by Oakley founder Jim Jannard. (Allegedly, this will be the best camera ever designed for shooting digitally, with all kinds of black magic technology inside.) I'd been thinking that they were going to have a working prototype ready for NAB... but Schilowitz says no.

Finally, Mike offers his notes on a digital camera discussion that took place yesterday at NAB.

Sunday, April 23, 2006

Director spars with Mark Cuban over release plans

Director Alex Steyermark isn't very happy with the release schedule for his forthcoming film, `One Last Thing...' It stars Gina Gershon and Cynthia Nixon, and tells the story of a terminally ill teen who makes a racy last wish.

Mark Cuban's 2929 Entertainment plans to release the movie in theaters on May 5, show it on cable (HDNet) on May 19, and start selling the DVDs on May 23rd.

Gregg Goldstein of the Hollywood Reporter writes:

Steyermark has enjoyed working with HDNet and Magnolia, saying, "They're good, smart people." His hopes rose after the film screened last September at the Toronto International Film Festival, where he says Cuban expressed interest in releasing it wide. Steyermark lobbied to have a longer DVD window. By last month, it was decided that the movie would have a brief 2-1/2-week window between theatrical and DVD.

"I think in the end he's going to be thrilled he signed up for it because it's going to be the best thing for his movie," [HDNet Films' Jason] Kliot says. Along with [Magnolia Pictures president Eamonn] Bowles, he contends that, given their limited budget for prints and advertising, the approach will maximize the simultaneous theater and DVD promotion. But all parties admit it is an experiment. [HDNet Films and Magnolia Pictures are both owned by 2929 Entertainment.]

"We're seeing if a small window makes any difference in enticing exhibitors to come aboard or not," Bowles says. "It's a bit of a fact-finding mission."

- NATO president John Fithian talking about ODS, or "Other Digital Stuff"- Dave Schnuelle of Dolby discussing 3-D- Matt Cowan of Real D on the same topic- Info about future 3-D- Chuck Goldwater of Christie/AIX talking about the progress of the digital cinema roll-out (they plan to have 550 screens in 70 locations installed by the end of June)- Lots of info about mastering movies for digital cinema

Changes in the world of music videos

Record labels are spending less on music videos, according to this great piece in today's Wall Street Journal, and hoping for them to earn a return -- rather than just serve as free promos for the album. On iTunes, for instance, labels apparently earn $1.40 of the $1.99 price of every video sold.

Here's a taste of John Jurgensen's piece:

...[M]usic executives also say the big video budgets of the 1990s are generally unnecessary, now that videos are most often watched on small screens like laptops and video iPods. Reality TV programming and the success of amateur "viral" videos that viewers watch and email to friends have changed the expectations of young viewers, says Monte Lipman, president of Universal Republic Records. Better and less expensive video technology has also helped keep costs down. And a big budget doesn't guarantee wide TV exposure. "For every video you'd see on MTV, there were 10 more that didn't make the cut, and that adds up to millions," Lipman says.

Instead, labels often now focus on creating Internet-friendly clips that could take off as viral videos. They reduce budgets by shortening shooting schedules, using young directors hungry for work and often filming bands in front of a green screens, so that settings can be added later, rather than filming in multiple locations.

"I can say that a lot more of the money is going into low-fi production," says Michael Nash, Warner Music's senior vice president of digital strategy.

Directors, producers and musicians have responded to changing music video landscape in a variety of ways. Some have modified their production routines. Hype Williams, a music-video director best known for his big-budget videos for hip-hop stars like Missy Elliott and Busta Rhymes, says he's reduced his typical video crew from about 40 members to about a dozen in recent years. He also now designs his videos to be watchable on small screens like video iPods. "In the last four months, it's all been close-ups," he says. "You have to think like that now."

Mr. Williams, who once spent almost $1 million constructing a faux mansion in the style of "Citizen Kane" in a New York shipyard for a video for singer R. Kelly, recently was given a $400,000 budget for a video for rapper Lil Jon. He filmed the rapper in front of a green screen.

Another example Jurgensen cites is Death Cab for Cutie, which commissioned videos for all eleven songs on a recent album from different directors. Each had a budget of $10,000. The directors had total creative control -- but no access to the band members. The videos are being sold now as a DVD and on iTunes.

Friday, April 21, 2006

Is vox populi becoming more important than the opinions of movie critics?

This Forbes column observes that "11 movies so far this year haven't been shown to critics--up from two in the same period last year."

Does that mean that digital word-of-mouth, and online reviews written by fans, are gaining in influence?

Marc Babej and Tim Pollak write:

...There are millions of consumer-generated Web sites and blogs on just about every topic, including every movie genre, sub-genre and sub-sub-genre. Many of these sites are particularly effective at generating word of mouth among die-hard fans on just about every topic. For movie studios, fan outreach represents a golden opportunity. As it happens, many of the mainstream critics' least favorite genres, such as horror or sci-fi, have fan bases that use the Internet heavily and accept the opinion of a passionate amateur over that of a critic any day. It won’t be long until the next big horror release is pre-screened to top horror bloggers, while professional critics are left out in the cold.

Thursday, April 20, 2006

Warner Bros. goes digital with Christie/AIX

Warner Bros signed on yesterday to distribute digital movies to theaters via the Christie/AIX network. The only major studio that hasn't signed up with Christie/AIX so far is Paramount. (Though DreamWorks, now part of Paramount, is involved.) The press release says that Christie/AIX is also "continuing late-stage negotiations with other studios including independent distributors to ensure that ultimately all movies can be available in digital versions."

Totally unrelated: Panasonic brought its 103-inch high-def plasma television to New York yesterday for a news conference. It'll be available in time for the holidays...no word on price.

Wednesday, April 19, 2006

News items: HD-DVD, Porn Industry Leadership, AT&T/Akimbo, Video PCs

- How do you know if you're a pathological early adopter? You were in line yesterday to buy a Toshiba HD-DVD player and one of the three movies available for it (`Serenity,' `The Last Samurai,' and `Phantom of the Opera').

- The LA Times observes that the porn industry often deploys new technologies that later get adopted by the mainstream media players. In this case, they cite movies purchased and downloaded from the Net that can be burned onto a DVD. (A hard drive, after all, can only store so many movies.) Claire Hoffman and Dawn Chmielewski write:

Hollywood has resisted burnable discs that can be watched on televisions because they fear piracy. It also doesn't want to alienate retailers, which sell most of its DVDs. But if history is any guide, the online experiment by adult entertainment giant Vivid Entertainment Group will be watched closely by mainstream studio chiefs.

"The simple fact is porn is an early adopter of new media," said Paul Saffo, director of the Institute for the Future in Palo Alto. "If you're trying to get something established … you're going to privately and secretly hope and pray that the porn industry likes your medium."

Los Angeles-based Vivid will start selling burnable movies May 8 through online movie service CinemaNow. Marina del Rey-based CinemaNow last fall launched an adult service that it uses to experiment with features that might eventually become mainstream — such as pay-per-minute movie rentals and the ability to save favorite scenes.

Vivid, producer of such titles as "Bad Wives" and "Generation Sex," will offer 30 downloadable videos for about $19.95 apiece that include everything that is on a standard DVD — cover art, scene navigation, bonus material and deleted scenes. The finished disc will be copy-protected to deter piracy.

- AT&T and Akimbo have just created a partnership, according to the Wall Street Journal. The deal "involves more than 10,000 television on-demand programs and movies, in a boost for the phone company's plan to offer on-demand video service to millions of consumers." Peter Grant continues, "The Akimbo on-demand content, assembled from 165 different programming owners varying from the BBC to the History Channel, will be part of the on-demand video service offered by AT&T's venture with EchoStar Communications Corp., known as Homezone."

- Finally, the Journal says that consumers are buying more powerful and capacious PCs to support video viewing. Carmen Fleetwood writes, "The growing availability of video content online isn't expected to boost PC sales in the near term but could alter the mix of machines sold over time as consumers may decide to purchase more high-end and laptop models to take advantage of the available content."

Tuesday, April 18, 2006

A Short Guide to Your Media Self-Distribution Options

Just stumbled across this list, compiled by David Tamés, an old Boston acquaintance of mine, of some of the ways to self-distribute video and movies on the Net.

It includes options like IndieFlix and CustomFlix, which help filmmakers make their products available on DVD; YouTube and BitTorrent; and MySpace. Missing, though, are sites like Google Video, Veoh, ClipShack, and Blip.tv.

"I've spent my entire career in a world of gatekeepers," Mr. Eisner said in an interview. "First there were motion-picture theaters, then the three broadcast networks, then cable and satellite. And now we have this ubiquitous ability to distribute content in a very efficient way. I think in a decade everyone will be surrounded by this Veoh type of technology." Mr. Eisner said Veoh is one of five or six media investments he has made since setting up a limited liability company, or LLC, called Tornante Co. He said Veoh is the only investment he has disclosed to the public.

Incidentally, someone representing Blip.tv, another video-sharing site, recently called my attention to a controversy involving Veoh pulling videos from other sites and republishing them on its own site.

Monday, April 17, 2006

Students and entertainment industry insiders are invited to attend the digitally-projected screenings put on by the Entertainment Technology Center at their Hollywood Pacific Theatre Digital Cinema Lab, 6433 Hollywood Blvd.

If you're in the LA area (this sounds like a game show), you can register on-line to see these features:

Kodak raising prices for movie film

Kodak's profit margins on the film stock it sells in Hollywood have always been high. One way the company could've helped to stave off the arrival of digital cinematography, a number of people have suggested to me, was by dropping its prices, while still earning a profit. That would've ensured that shooting on film stayed (relatively) competitive with shooting on digital videotape, and made it an easier choice for everyone to preserve the status quo.

Friday, April 07, 2006

New Line: Go ahead, mash it up

The studio...wants to take the lead in finding alternative ways to market movies beyond traditional methods like advertising on television and in newspapers. It is a search that is also preoccupying the rest of Hollywood, anxious to reverse a slump in ticket sales.

For "Take the Lead" — a romantic drama about a professional dancer who volunteers to teach all the right moves to New York City schoolchildren — New Line is sponsoring such unusual marketing initiatives as a chance for computer users to create unofficial mash-ups. Those are mixed versions of music from the movie, using material available on the film's official Web site (taketheleadmovie.com).

New Line is also providing a variety of blogs, online social communities and Web sites with mash-ups of music and images from "Take the Lead" produced by professional D.J.'s and V.J.'s, which supplement the trailers for the movie being shown in theaters. The D.J.'s are also playing the mash-ups they produced during live events at clubs where they work.

Among the online sites where the mash-up trailers can be watched are Google Video (video.google.com), iFilm (ifilm.com), MySpace (myspace.com), TagWorld (tagworld.com) and YouTube (youtube.com).

`Hollywood's Popcorn Recipe' - Wall Street Journal

The Wall Street Journal reports on Hollywood's strategy for timing its 2006 summer releases... the gist is, just like Christmas decorations go up the day after Thanksgiving, and marshmallow peeps start showing up in February, your `Pirates of the Caribbean' sequels will always open in July. From the article:

Every summer, Hollywood serves up formula movies. But in recent years, the entire popcorn season has become a formula, too -- from the number of movies with budgets of more than $120 million (about five), to the number of major-studio comedies (a dozen), to the release dates for movies with a particular director. Ready for the latest spoof from the Wayans brothers? Check your local theaters in early July. That's when the rotating roster of comedic siblings released their hits "Scary Movie" and "Scary Movie 2" and it's also when you'll see this summer's "Little Man," in which Shawn Wayans mistakes an unusually short criminal for his adopted son.

It's a tough time for studios and theaters. Facing decreasing attendance and increasing competition from TV, they saw annual domestic box-office revenues slump by 6.2% last year, and the summer falloff was even steeper -- down 8.5% to $3.62 billion. In part, Hollywood's summer-by-the-numbers approach is an attempt to focus on what has worked in the past, including time-tested plot devices and rollout strategies. For example, after Disney's "Pirates of the Caribbean: The Curse of the Black Pearl" scored the best July opening of 2003, the studio did the logical thing: It scheduled this summer's sequel in the same weekend. "There is a little bit of superstition in all of us," says Disney's president of movie distribution, Chuck Viane. "You always gravitate back to where you've done well."

But will moviegoers respond to that kind of predictable `shelving' of new movies? We'll see in the next few months.

Thursday, April 06, 2006

$8 million for video-sharing site YouTube

The video-sharing Web site YouTube is just over a year old, and has already attracted $11.5 million in venture capital. (The most recent investment, this week, was another $8 million yesterday, from Sequoia Capital, those guys who funded a li'l auction site call eBay. YouTube currently has a collection of 35 million short-form videos, 9 million visitors a month, and just 20 employees. Not bad at all. (Google Video, by comparison, attracts just 6.2 million people per month.

If you haven't been to YouTube before, it's worth having a look at what people are uploading and watching. Here's the page of most-viewed videos, a great indicator of what works on YouTube. (Note the tags on the right side of the page - a way for users to categorize the videos they upload.)

Here's a recent piece from BusinessWeek, which says that "YouTube could be a new NBC -- or another Napster."

The company's founders used to work at PayPal, which eBay acquired. Co-founder Chad Hurley told me last year that they all had these cell phones and digital cameras that could shoot video, but there was no easy way to share it. "We have parents on the east coast and in the Chicago area, and we wanted to make something that everyone could use easily," he said. Putting advertising in front of the video clips before you watch them is an obvious business model, but Hurley told me, "We want to give the users ways to control how we make money on the product through advertising. We don't want to create the force-fed advertising culture that some large sites have."

Hurley mentioned that they'd been shooting video of the genesis of the company - it started in a garage, don't you know. Those'd be fun to see - and maybe one day fodder for the classes at Stanford Business School.

Wednesday, April 05, 2006

Simultaneous releasing: The plot thickens

Mark Cuban is the movie industry's biggest advocate for releasing movies simultaneously in several formats (DVD, TV, in theaters). But this week, he's refusing to show a new autobiographical comedy called "I Am a Sex Addict" at his Landmark Theaters chain, because IFC Films, the movie's distributor, is releasing it simultaneously in theaters, and on cable, as a video-on-demand selection.

Hypocrisy? Cuban says no. He's just trying to convince Comcast, which is IFC's partner in the cable VOD deal, to carry his two cable channels, HDNet and HDNet Movies. (That's where he has been airing his company's day-and-date releases, such as `Bubble' and `Enron: The Smartest Guys in the Room.')

In the past, Cuban has made it clear that he doesn't support simultaneous releasing as a religious doctrine, but as a strategy that can benefit his business. He told the Chicago Tribune, "Comcast doesn’t carry HDNet and HDNet movies, and that’s a requisite for Landmark support of their day-and-date efforts if Comcast is involved."

So who has stepped forward to give `I Am a Sex Addict' screen time at his theater in San Francisco? (The movie was supposed to have played at a Landmark house in Berkeley.) None other than Gary Meyer, Landmark's original founder, who now runs The Balboa Theater.

Tuesday, April 04, 2006

A Foley artist renaissance?

Richard Verrier of the Los Angeles Times has a charming and informative piece today about Foley artists. You know, the folks who add sound effects to movies by doing things like walking through gravel or cracking a whip. Verrier recounts the history of Foley artistry, invented by Jack Foley, who added sound effects to 1929's `Show Boat,' and later figured out how to create the sound of Roman legions marching in armor for `Spartacus.' (Answer: jangling keys.)

Verrier says the field is enjoying a bit of a boom:

You might think that [the] profession, which got its start with the birth of the "talkies," would be one of the first casualties of computer-generated cinema. After all, foley artists — whose craft was invented in the 1920s by an enterprising stuntman and director named Jack Foley — pride themselves on being low-tech.

But thanks to improvements in digital recording equipment and the boom in computer animation films that lack ambient sound, foley artists are becoming increasingly important players in movie production.

In the last few years, several Hollywood studios have upgraded and expanded their foley soundstages, known as "pits," to help artists make noise the old-fashioned way. They gleefully stomp on cereal boxes, crush pine cones with hammers, whack car doors with crowbars. Why synthesize a sound, they argue, when you can have the real thing?

In the last 10 years, increasing demand for foley artists has doubled their ranks to about 100, mostly in Los Angeles.

At Sony Pictures Studios, the volume of foley work has doubled in the last three years.

Monday, April 03, 2006

The low-down on Movielink's new download-to-own offerings

Movielink, the joint venture started in 2001 by five major studios to foster legal Internet movie downloads, is announcing today that it is finally offering digital movies that you can own, not just rent. This has been a long time coming. Studios have said that they don't want to suffer the same fate as the record industry -- namely, out-of-control piracy -- and yet until today they'd completely avoided the phenomenally successful Apple iTunes `you buy it, you own it' model of electronic commerce. Movies, like `King Kong' and `Brokeback Mountain,' will be available for download from Movielink as soon as they're released on DVD.

So far, so good. But the studios are learning veeerrryy sloooowwwlly how the Internet customer behaves. (Movielink CEO Jim Ramo is no dummy, but his business is constrained by what his studio partners will let him do. Poor guy: it's like he's in business with the mob.) There are three giant drawbacks to buying Movielink's downloads-to-own:

1. They're deliberately very difficult to watch on a TV, and impossible, for now, to watch on a portable device like a video iPod.

2. Movielink only supports Windows 2000 or XP, not Mac or Linux. (God bless Microsoft DRM, which deserves a thorough investigation from the Justice Department.)

3. Despite the fact that the movies are basically limited to playing on your PC (you can burn a DVD that will play on two other computers, but not on a TV), the movies are priced higher than DVDs. Memo to the studios: consumers expect digital goods to be priced the same or less than physical goods, not more. (An interesting note -- a quick check of album prices on iTunes and Amazon finds that the prices are pretty close -- ten bucks will buy you a complete album in both places.)

Here's a snippet from Saul Hansell's piece in this morning's NY Times... he notes that the digital downloads also lack the extra features of a DVD, like director's commentary and deleted scenes:

...the services must compete with chain stores and Web retailers that often discount DVD's to below their wholesale cost to attract shoppers. Such low-priced items are known among retailers as "loss leaders."

For example, "Memoirs of a Geisha," from Sony, will cost $19.99 to download from CinemaNow and $25.99 from Movielink. As a DVD, by contrast, it is priced at $16.87 at Wal-Mart. "King Kong," from Universal, which will cost $19.99 from both download services, is being sold on DVD for $14.96 by Amazon.com and $13.99 by Circuit City.

"They are giving the consumer less and charging more for it," said Warren N. Lieberfarb, the former president of Warner Home Video and now an entertainment technology consultant. "To me this really stacks the deck against mass consumer adoption."

Mr. Lieberfarb said providing a download costs a studio at least $5 less than a DVD because the computerized format does not require manufacturing, distribution and product returns. But the studios are wary of offering inexpensive downloads out of fear of offending the chain stores.

"The studios are caught between a rock and a hard place," Mr. Lieberfarb said. "If they don't make movies available electronically, piracy will get them. But they simultaneously have to take care of their brick-and-mortar customers." If the chain stores became angered, he said, they might pull back from their heavy promotion of DVD's.

Hansell's piece also suggests that one way the studios could make Movielink more attractive is by turning it into a vast archive of hard-to-find movies -- stuff that isn't available on DVD, for instance. But that hasn't happened yet. There are only 300 download-to-own titles available, and about 1100 rental titles on Movielink. That compares with 55,000 titles available for rent from Netflix.

Sarah McBride of the Wall Street Journal observes that "one of the many reasons the studios founded Movielink, however, was to show Congress and the courts they were taking action to provide a legal alternative to piracy. That way, if they went to lawmakers to ask for harsher piracy laws, or to courts to ask for their enforcement, they could say they weren't simply afraid of technology."

From the LA Times piece, some thoughts from Netflix CEO Reed Hastings, who has been having his own trouble obtaining movies from the studios for digital delivery:

U.S. consumers spent $24.3 billion buying and renting home videos last year, according to Digital Entertainment Group, a trade association. And with sales projected to grow to $30 billion by the end of the decade, the studios are more focused on supporting their existing business — and backing a new generation of high-definition video disc formats known as Blu-ray and HD-DVD — not cannibalizing the market to support downloads, said Reed Hastings, chief executive of online movie rental service Netflix Inc., which mails DVDs to 4.2 million subscribers.

"At some point, the studios will be interested in broad-scale licensing," Hastings said. "At some point, the Internet will be connected to the television. We see those as the two linchpins. That will happen eventually, but it won't happen this year."

Also...CinemaNow is also going to be offering download-to-own movies. CinemaNow's deal will make available movies from Sony, MGM, and Lionsgate, which is the majority owner of CinemaNow. (CinemaNow's movies, it should be noted, can only be played on one computer, making Movielink seem by comparison like a generous uncle.) Movielink will have titles from Universal, Sony, Warner Bros., MGM, and Paramount. Disney seems to be sitting on the sidelines for now, perhaps waiting to offer its movies via iTunes?

About

CinemaTech focuses on how new technologies are changing cinema - the way movies get made, discovered, marketed, distributed, shown, and seen. (With occasional forays into other parts of the entertainment economy.) You can also follow CinemaTech on Twitter (@ctechblog).

About Me

For about the last ten years, I've been writing about innovation for publications like the Boston Globe, the New York Times, Wired, Variety, Fast Company, the Hollywood Reporter, Salon.com, BusinessWeek, and Newsweek.
I helped start (and continue to help run) three conferences: Future Forward, the Nantucket Conference on Entrepreneurship & Innovation, and Convergence: The Life Sciences Leaders Forum. I also often speak and moderate at other people's conferences, and serve as a commentator on TV and radio. (Which beats actual work.)
You can reach me by e-mailing kirsner - at- pobox.com. My personal site is www.scottkirsner.com.